Once children begin to understand money and how to earn it through hard work, it’s time to teach them how to start saving what they earn over time. In this week’s FutureTrack for Kids discussion, we’ll share success stories on saving for kids, learn how to illustrate the impact of child saving plans and explore three ways to save and spend money.
Consider the first big purchase you made as a young adult. Perhaps it was a bicycle, your first car or a favorite collector’s item. How did you decide you wanted or needed it? What was the first step you took toward saving for it? Did you get a summer job, or did you need to create a budget in order to finance the purchase each month? Sharing your own saving for kids success story of how you made your first big purchase with the kids in your life can help them understand and appreciate that everyone – from their parents to their teachers and coaches – has needed to save money in order to buy something they value.
Whether you decide to eat at home more often, carpool with a colleague or brew your own coffee, changing your daily or weekly routines just a little can make a big difference at the end of the month, and even more so over the course of a year. Show the kids in your life just how much of an impact these small savings habits can have with an experiment at home or in the classroom.
Create a simple child saving plan that will illustrate how saving a small amount of their allowance or paycheck each week will add up in one month, six months, and one year. You can also follow this exercise with at-home privileges like television or Internet time. For every 5 minutes of TV time kids give up, they get a step closer to a trip to the movies or choosing what’s for dinner.
Saving habits for kids can also be promoted in the classroom. Try using play money or coupons that can be used right away for small privileges, or, when saved up, can be used toward homework passes. The more significant the privilege, the more money or coupons they will need, and the longer they will need to save.
Saving for kids isn’t the only lesson to share this Financial Literacy Month. Better money habits and giving to those in need are equally important messages. The 1-1-1 Rule is a good model for explaining this balance. For every monetary gift, month of allowance or paycheck, one third should be put away into savings, one third can be used to spend, and one third can be donated to a charity.
For kids too young for summer jobs or allowances, you can find volunteer opportunities to do as a group that will help communicate the importance of enjoying free time, and dedicating time to those in need.
Start mapping out your own savings journey by visiting our FutureTrack website. Tune in next week to learn how to start budgeting with the kids in your life.